Cinema’s Are Back: Good News For The Toy Business?
After some dark days in the last year or two through the covid pandemic, cinemas are slowly but surely making a comeback. In the UK, Odeon cinemas has announced a full reopening across its estate on 17th May (2021). Over in the good ol’ U. S. of A., AMC movie theaters are close to fully open, with more than 7 million visitors reported in Q1 202, albeit with more limited seating capacity due to social distancing measures, but nevertheless it looks like movies are back.
The immediate challenges abound of course. Firstly, amending the business model to deal with significantly fewer customers per screening will not be easy. Also, and perhaps more fundamentally, due to movie release slates being all over the place, these movie theatres will be desperate for as many big releases to come through as soon as possible in 2021. At the time of writing, Godzilla vs Kong is the major toyetic movie showing. Just over a month from opening, and box office figures are obviously far lower than we might have expected pre pandemic, but nevertheless are surprisingly good in the circumstances. US box office takings so far are c. $90m USD, which is fairly modest, but including international, total global takings are over $400m USD. Intriguingly, China accounts for c. $185m of this global total, which is more evidence of the growing commercial presence of China in the entertainment business.
We can expect that with movie releases so disrupted that whichever movies come out in the first half of 2021 may stick around until well into the 2nd half of the year. There is plenty of content backed up though, so with China seemingly in control of the covid situation, and with the USA & UK well ahead of the game on vaccinations, we should see some degree of normality heading into the back end of 2021.
For the first time ever, the previously unthinkable situation of simultaneous release of movies in cinemas and for home viewing is obviously a challenge for movie theatre chains looking to bounce back, but for the toy business it offers both increased security and also incremental opportunity versus how things were in the past.
The challenge for anyone with a master toy license for a major movie in 2020 was the lockdowns and uncertainty, alongside lack of distribution. In 2021, while circumstances remain far from ideal, the reopening of cinemas alongside simultaneous direct to home viewing should see licensed toys regain market share in 2021 and heading into 2022 with all major studios having content backed up, at least in the short term, things look more promising going forward than they have at any time in the last 12 months.
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